Sequential Procurement of Energy and Operating Reserve under Competitive Electricity Market

Abstract

In a competitive electricity market, Ancillary Services (AS) plays an important role, as these services are essential for required reliability and safe functioning of the electrical scheme. Procurement of reserve based AS, that is, Operating Reserve (OR) is considered in the present work. OR is defined as an ability of a generating resource to prevent any unanticipated discrepancies initiated from outages. The present work considers sequential procurement of energy and OR, which can hold up the growth of an effective reserve distribution and pricing mechanism. With the consideration of cost minimization, this mechanism clears Energy Market (EM) and Reserve Market (RM) sequentially. The formulated problem is optimized through Optimal Power Flow (OPF) approach while considering constraints like generation and line limits. The discussed market scenario has been validated on a modified 5 unit PJM system.